Cargotec to expand offering and presence in China through joint venture with China National Heavy Duty Truck Group Co., Ltd

Cargotec is planning to establish a joint venture with China National Heavy DutyTruck Group Co., Ltd (CNHTC), a leading Chinese manufacturer of heavy dutytrucks and the parent company of Sinotruk. This will enable Cargotec to expandits presence in the Chinese load handling market.

Cargotec would have 50 percent ownership in the joint venture. Over a planninghorizon of several years, total investment costs of the joint venture would bearound EUR 100 million. Cargotec's estimated equity investment during the firstyear is approximately EUR 10 million.

The transaction is subject to the relevant regulatory approvals, which areexpected in the next six to nine months.

CNHTC's extensive network, including dealers and service stations all overChina, would be used by the joint venture for the distribution, sale and serviceof Cargotec's Hiab cranes and hooklifts.

The joint venture would also further develop CNHTC's existing truck craneoffering and production base for the Chinese market. By combining bothcompanies' technical know-how, the joint venture is expected to become asignificant player in the truck crane business in the near future, particularlyin China.

"This joint venture represents an important strategic step for Cargotec,demonstrating our commitment to growing our offering and presence in China.Cargotec's strong existing range of load handling equipment, combined withCNHTC's leading position in the Chinese heavy truck market, will secure a fastand cost-effective channel for placing Hiab equipment in the hands of customersall over China," says Mikael Mäkinen, President and CEO, Cargotec.

"Cargotec's long experience of technical innovations makes it the perfectpartner for the joint development of a new truck crane range tailored to theneeds of Chinese customers. Together, we expect to build world-class expertisewith the purpose of securing a strong market position for truck cranes," statesMr. Wei Zhihai, Vice President of CNHTC.

Double-digit growth in the total market for load handling equipment in China isexpected over the next years, driven by robust demand for new equipment andreplacements and for greater efficiency in the infrastructure, industrial andproperty sectors, as well as by urbanisation. Cargotec estimates the existingmarket for truck-mounted cranes in China to be around 10,000 units, dominated bylocal manufacturers.

The main market for truck cranes is China with around 35,000 units sold in2011.

Cargotec has had a presence in the Asia-Pacific region for more than 30 years,with its own representation and operations for Load Handling business since1973. Today, Cargotec has five factories in the Asia-Pacific region.